When all other inputs remain fixed except one, and increasing that variable input causes its marginal product to decline gradually, what principle does this illustrate?

Multiple choice question for Costs , Supply And Perfect Competition. Select an option, then review the explanation below.

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Declining returns to scaleThe principle of diminishing returnsConstant returns to scaleAn ineffective production methodIncreasing returns to scale

Explanation

The scenario describes the law of diminishing returns, which states that as more units of a variable input are added to fixed inputs, the additional output produced by each new unit eventually decreases.

Practice related questions from the same subject.

1.In the context of a perfectly competitive firm, what represents its short-run supply curve and its long-run supply curve respectively?
2.Under what condition will a firm cease production and produce nothing in the short term?
3.In the short run, the average total cost is composed of which two components?
4.What is the relationship between marginal cost and average cost when the average cost is decreasing and when it is increasing?
5.What does it indicate when the long-run average cost curve slopes downward from left to right?

When all other inputs remain fixed except one, and increasing that variable input causes its marginal product to decline gradually, what principle does this illustrate?

Explanation

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